S9E116 Cody Journell / Vegg, Inc. - Revolutionizing Vertical Farming & Supporting Local Farmers

00:00 - Harry Duran (Host)

So, cody Jernel, founder and CEO of veg Inc. Thank you so much for joining me on the Bergle Farming podcast.

00:06 - Cody Journell (Guest)

Pleasure to be here. Thanks for having us. Where's home for you? I am located in Blacksburg, virginia, okay, so home of the Virginia Tech Hokies, and our facility is actually about 30 minutes from here in Pulaski. Okay, you born and raised there, close to here, another kind of neighboring town, you know, small farm town, rural Virginia area. So that's kind of where the background and an agriculture started is their agriculture in your family history.

00:35

There is and that's honestly what spurred the you know, some of the jump into vertical farming and CEA was. We had a family farm that was passed down through Generations and generations and we got to kind of our age group of kids and you know my grandfather went to Could inform it anymore and didn't have anybody that necessarily was, you know, tilling up land and growing crops in the field anymore.

01:03

So we actually had to sell that within the last three to four years and it was. It's definitely something that we saw, you know, was kind of dear to everybody's heart and you know it's just it's not something that kids are growing up and doing now and then, you know, getting into the controlled environmental Agriculture space, it really kind of blended, you know, the new technologies and in agriculture and still Still providing a way for us to supply, you know, food to our communities and really interested us in that space.

01:33 - Harry Duran (Host)

So I See that you have a background in real estate as well. For the benefit of the listener, can you share a little bit of your background? We'll get into the story of edge. But I'm curious about you don't have to give the whole bio or a little bit about the journey that they got you to present.

01:47 - Cody Journell (Guest)

Yeah, you started out, you know, wanting to Jump into real estate, investing full-time. But you know, more I learned about that, the more I realized what I didn't know Getting into it and it's not a you know, it's not a cheap endeavor to get into. So I ended up getting my real estate license About seven years ago at this point and that led us into starting a brokerage here in town. We started a property management company. Then we started doing some investment deals at that point, got into some developing, some redeveloping, some historic tax credit deals which kind of lead into this as well, and what we're doing with veg in our facility. So that's where the background came from. It was in sales, property management, quasi Development, and you know now it's, we're using those skills with our company, veg.

02:38 - Harry Duran (Host)

So talk a little bit about the origin story and you mentioned your family does have a little bit of background in agriculture, but like when did you know CEA come on your radar and what was it about it? That was interesting for you and peak to peaks your interest.

02:51 - Cody Journell (Guest)

Yeah, I think you know, the biggest thing for me and we didn't necessarily jump into it, probably at the Same approach that a lot of folks do, you know, whether they have a background in, you know, agriculture or plant science or something along those lines but we actually Located or pinpointed this building in Pulaski and it's an old, abandoned school building that's right in town. It's about 30 to 40,000 square feet of space and we really we looked at this and we're trying to find what to do with the real estate, because it was a great deal. The town owned it at the time, so they were looking to do something with it. That wasn't apartments, which is what most of the the old school redevelopments turned into, and we were looking at this. But at the same time, you know, had made some connections that were in the vertical farming space and you know there was kind of a eureka moment there where we said, hey, we're learning about this just outside of anything that we've done with real estate.

03:52

But what if we looked at this building and entered a lot of the problems that we're hearing about in the CEA vertical farming space and, you know, located in this facility? So that's kind of how the two concepts married into each other. The Historic nature of these buildings provides it provides an opportunity to use historic tax credits to renovate the building and you know we can get into it here shortly but that, a Lot of times, will allow you to develop it anywhere from 40 to 50% of a discount on the actual real estate as opposed to what you would do in a traditional Development style. So you know, looking at the CEA industry, one of the biggest things through our customer discovery there was finding that the upfront capital costs and acquisition of the real estate and the Money that was needed to develop the real estate whenever you're building out your own facility Was a huge problem for a lot of especially small to medium-sized growers that didn't have a lot of you know, they don't have a venture capital backing like some of the larger players do.

05:00

So we said what can we do if we took this facility? Use some of the techniques that we're already doing, then the real estate side and the development side, and then provide High-tech, leasable space to these vertical farmers that you know, don't have the capital to go out and build their own facility from scratch.

05:16 - Harry Duran (Host)

Talk a little bit about that experience that you've had in real estate, because I think you do provide a unique perspective. You know, like you said, having had that background and maybe realizing that real estate was not the path, but there's a probably a lot that you did learn you talked about. You mentioned the tax credits for folks that don't have that background in real estate. Can you talk a little bit about your thought process and how everything you'd been learning up until that point could be applied to this project?

05:43 - Cody Journell (Guest)

Absolutely so.

05:44

One of my favorite things about real estate we're still in real estate to some degree in certain areas but one of my favorite things about real estate is the fact that it is 100% what problems you can solve, whether you're successful or not.

05:57

So you know, whether it's even a transaction that you're helping someone out with, or it's a building that you're looking at to develop, or there's some zoning Requirements or something that you have to work around, it's always a problem that's being solved and you know you solve big problems and you know Big profits follow. So that was kind of the same approach that we took with this building and getting into you know CDA in general was a look, there's a building here, there's a problem agriculture how can we marry the two concepts and, you know, provide a Really good foundation and kind of hub space. Three, the real estate that will marry the vertical farmers and the you know the CDA industry together and solve those problems. So yeah, I guess that's probably the biggest thing when it comes to what my real estate background has Garnish and it allowed me to push forward not only in, you know, the development side, but just business in general. It's always a problem that you're trying to solve, so that's a good skill to have.

07:01 - Harry Duran (Host)

Yeah, definitely, because it's something that people that are new to the industry may not have that experience in and sometimes they have to learn that the hardware right not, especially when it comes to dealing with issues like real estate and zoning and and municipalities and dealing with government agencies and cities and you know seeing what else is there and If you're in the right place.

07:21

Energy cost electricity, you know. I wonder if you could just kind of dive a little bit deeper in that, because you do have a unique perspective on that. What a for folks who don't understand, like this idea of tax credits and why that's so important. Can you talk a little bit about that as well?

07:36 - Cody Journell (Guest)

Yeah. So I think the biggest thing that again we found through our customer discovery calls and things along those lines is you know, a lot of these, a lot of vertical farmers, are just anyone in the CEA industry that is interested in growing, you know, produce or some form of crap they want to farm and they might not understand it until they get into it, but there is a lot that goes into the real estate side of that and the development side of that. So you know they'll get into it. And they said, man, I just wanted to build a farm out and, you know, grow produce and sell it and provide food for my community. But now I'm playing developer or I'm playing real estate agent or I'm playing this or that, going to you know community meetings and having to rezone things and talk to infrastructure providers. So that was another one of those around fire moments that we found when we were speaking with farmers in general was, you know, we just want to form, right? So if we had a space where we could come and just form and didn't have to deal with all the other headache that goes into it, that would be very valuable to us. And then us looking at it internally was. Another problem we found through our customer discovery was the operating margins in the space are pretty tough, with real estate prices increasing cost of goods pretty much everything going up with inflation. How do we solve that problem for farmers as well, and that's where the historic tax credits come into play.

09:03

We did a lot of research into what schools were available. We think there was a 2021 study that found there's almost 4800 abandoned school buildings just on the east coast of the United States. By itself, yeah, so that number is growing. We have a lot of consolidations with schools. These days, counties and localities are trying to save money, so they're consolidating schools, just building one instead of building three new ones, and then those buildings are sitting there A lot of times. They don't have anything to do with them. It's on the town and counties books. They're trying to figure out a project to do with it. Most of the time they turn into apartments, but especially in the rural areas that we're focusing on, you can only build so many apartments and for the population that's there and the localities are super interested in and trying to provide something that's bringing jobs to the area and skilled labor and the benefit of trying to solve the food, desert problems, things along those lines. So it's been received very friendly in presenting some of these ideas.

10:05

But going back to the historic tax credits, essentially what that is is an incentive for developers to take old buildings you know, it doesn't have to be a school, it's really anything over 50 years old, I believe that could qualify for them and then using this program to kind of subsidize your cost to redevelop it and bring it back up to workable standards. And there's a lot of red tape because you're dealing with the government. Obviously there's a lot of kind of ins and outs and luckily we've got, you know I've got partners in this. Luke Allison is our chief development officer. He's got a lot of background in historic tax credits and working with an architect that has a lot of background in it, because there is some kind of quirky things that you have to consider when you're building these projects out. They want the roof line to look exactly the same as it did.

10:57

A lot of the exterior. The doors, hallways, things along those lines have to go back to what that original footprint was. And then we're working with cultivated, who obviously a big partner of your guide, but we've been working with them on how do we take this structure and the footprint that we need to keep within the bounds of the historic tax credit program but also build it high tech, you know climate smart, vertical farming facility within it, with you know grow rooms and production and packaging and distribution and stuff like that, which has been a bit of a challenge, but again we're problem solvers, so it's been great.

11:34 - Harry Duran (Host)

So for the listener who may not be familiar with VEG, can you talk a little bit about what your product offering is and who's an ideal client?

11:44 - Cody Journell (Guest)

Sure, yeah. So we are providing high tech, climate smart and I'll make note of that so I can touch on it later but climate smart, leasable vertical farming space. So we're taking historic structures, redeveloping them using these government incentives and tax credit programs and then providing leasable space for farmers to come in and pay per lease instead of having to front the bill up front for all the equipment and real estate costs and things along those lines, and we are getting into some production on our own. We're really interested in not competing with the big air farms and plant trees of the world, but more along the lines of focusing on niche products that we've identified gaps in our current agriculture practices. So whether it's deforestation some of the medicinal herbs that we're pulling that have high demand but the only way we're able to source them is to go out into the forest and pick them and it's causing issues around that or it's just niche products that we're having to source from overseas.

12:50

How can we look at where the gaps are? Kind of reverse, engineer what we can grow in our facility to provide it in a regional or at least in our local footprint. So that's our side of the production, but we're also going to have plenty of classroom space. The auditoriums in these schools are, you know, the one that we have is about 30 feet tall, so it lends itself to, you know, pretty decent amount of vertical farming space to farm in. And we're really interested in trying to get multiple tenants in this building where we've got a lot of different production in different areas. You know, through our leaching practices.

13:26 - Harry Duran (Host)

So when someone who is interested in this approach comes to you, obviously they've thought through all the costs involved in doing this on their own and they see that it's going to make more sense to have you handle mostly infrastructure, because it sounds like that's what you're covering here. How much additional help do they need? Or do they come prepared with like a business plan, takeoff agreements and do they have an idea of what they want to grow and you're providing that infrastructure guidance? Or are there, you know, some clients that you work with that really need a little bit more hand-holding?

14:00 - Cody Journell (Guest)

There's been, yeah, a mixture of both. You know, I would say we've had some come to us and say we've got all our equipment already. We need this much space. You know, how fast can we get it? Or when are you guys going to be ready for us to move in? And then there's also the ones that say, well, we're thinking about this, or we're thinking about this and we, you know, we might need some assistance on the build out and we're looking for our unit economics and things along those lines, and that's really where Cultivated has come in and helped us.

14:27

A ton Is looking at those. Ok, what's in demand in our area? What's it going to take for you to provide your own equipment? Can you afford that? If not, is there a way that we can, you know, build that out for you but then add it back to the lease amount, or we'll do a lease plus, you know, revenue model, something along those lines. So it really have left it open. We're here to provide a hub of farmers and we want to leave a door open to as many as possible to come in and either, you know, either get started in general or somebody that maybe has their first facility but they're growing out of it. But again they don't have the capital to go out and build a larger facility. So it would make sense for them to come in and, just you know, open up operations and scale within our facility.

15:15 - Harry Duran (Host)

Do you have folks that you work with that need help Once they've got the production in place? They know what they want to grow, but they're having challenges in terms of like who they can sell to. Are you developing relationships with distributors? You know food distribution companies and partners like that.

15:31 - Cody Journell (Guest)

Yeah, so kind of both. We have a relationship that we're formulating. I can't say any specific names yet, but there's a couple local, I guess, semi local, they're more regional than local feed hubs that are located, you know, within Virginia specifically, but they're, you know, they're kind of across the US and they aggregate produce mostly from local farmers right now. So we've been in talks with them about they have hubs in certain areas but based on where their hub is now it kind of limits the amount of farmers and product that they're able to get to that one facility. So they're very interested in looking at the way that we're trying to scale veg with these buildings. We're looking to create a network of buildings ourselves within the Virginia footprint but East Coast and across the US eventually as well, and they would. They think it makes a lot of sense to try and locate in one of these facilities and they would not only be able to aggregate the produce being grown in the facility but also the local farms around it.

16:34

We're very adamant about you know, my background obviously told me about my family, but very adamant about not coming in and trying to compete with what's being grown in our local farming economies. You know, traditional farming wise. This is more of a hey, we're here to fill the gaps in the agriculture system. I mean, we've even had traditional farmers come and meet with us and say, look, we see the benefit of this. We're only able to grow, especially in Virginia, maybe six months out of the year. What can we do to come in and increase our production through those winter months and, you know, fall and spring where things aren't really happening for them, and increase the revenue of their farms as well, and maybe they don't have to sell the farm like my family did you know.

17:16 - Harry Duran (Host)

Obviously there's a rich history in Virginia of farming and I'd be remiss if I didn't mention it. As of this recording, it's day two of the indoor ag con, CEA Summit East in Danville. So you know there's a lot of activity happening in Virginia, especially around vertical farming, and I think I saw that the was it the governor that actually had a CEA day or indoor farming day he announced, or something along those lines.

17:39 - Cody Journell (Guest)

Yeah, there's a lot of traction in Virginia specifically and he's publicly said he wants to be the kind of the epicenter of CDA in the United States. So they've been the local governments. The governor secretary of agriculture, matt Lorre, was at the summit yesterday. I actually left early today to get back and do this podcast, so I was there for a little while. But yeah, there's.

18:02

It's really refreshing getting that support from your governments and they're able to really push some things along and you know, earmark some things to try and get some of these projects under foot. And again, you know Virginia, we have Air Force has their facility here right in Danville where the icon is, and plenty is moving a facility here as well. There's some other pretty big names that are in here. But there is a gap for the small to medium size farmers. They don't have the ability to go out and grow or build a $300 million facility. They're just trying to produce what they can and they've been very receptive to the idea of having smaller kind of decentralized locations where these farmers can operate and provide to our local needs.

18:50 - Harry Duran (Host)

The first project you're working on was the pilot. Was the Jefferson School Correct? Yeah? So how far along is that project and what, if any? When you think about that as a pilot, there's always going to be lessons learned, things you didn't know, things you wish you had known going in. And so now that you've had your feet under you with that project, you know what are some of the things that our lessons learned from that experience.

19:14 - Cody Journell (Guest)

Sure, doing some developments and, you know, renovations myself over the last, you know, a handful of years.

19:21

It's been a high opening to see kind of all the systems that need to be integrated with a lot of technology backing to it. Specifically to our company, we have a goal of, at least in the growing portions of our facility, being completely carbon negative and we have some partners on the technology side that we're working with. One is Mova Technologies. They have direct air capture systems that pull the carbon CO2 out of the air and we're going to try and use that. I actually just started working on a grant that was awarded us, the SBIR grant, through the Department of Energy that we partnered with Mova Line to take their captured CO2 out of the air and use it to silt through and grow the plants in our facility. So, between those types of systems and the you know, the lighting technology, trying to figure out how much energy we're pulling from the grid, how we're, you know, recycling our water, things along those lines. That's what we kind of consider our tech stack and the goal was to get that to the where we're actually growing produce in a carbon negative environment.

20:30 - Harry Duran (Host)

And then you mentioned the idea of replicating this model across other locations. What are the potentials for what you're doing in Virginia, like how big can veg grow specifically in the location that you're at and where are you seeing the opportunities there?

20:45 - Cody Journell (Guest)

Sure, yeah, I think a lot of it really comes down to what's being produced in the facility. You know you don't want to really cannibalize your business as you're moving across into other areas, but the more we dive into it, the more folks that we talk to. There's so many applications that CEA can be applied to. So you know we mentioned the medicinal herb market. We're really interested in getting in and providing some of these crops for, you know, holistic medicines and some of the medicines that are on the rise that are a lot more natural based instead of the processed stuff that we're getting in our pharmaceuticals. And there's also the mushroom space that we've been working on.

21:28

And then, you know, you get in the niche products, even in, you know, tomatoes, like maybe this type of tomato isn't grown in our region but is in super high demand. So we kind of look at it. As you know, we're not just going to scale to scale, but as we find demand for these products and we kind of fill up this facility and we've proven our concept, then if it makes sense and whether it's us growing internally to produce in the next space or we have so many people that are trying to produce that we can go and start this next job. We're hoping that it scales that way and people start to see that there's a lot of value in leasing space instead of, you know, going out and spending all that capital upfront Right, especially in this high interest rate environment where it's eating into your margins and a lot of times, putting people out of business.

22:18 - Harry Duran (Host)

Yeah, I mean it's no shortage of news in the past couple of months of bankruptcies and restructurings and I think that's top of mind for folks, especially with the high CapEx costs and where people are really realizing that their strengths may not be on the facility side or in the equipment side or in the leasing side and they like, to your point, they really just want to farm. You know, and I think that's a sweet spot that you found what's been the biggest like learnings for you as someone who's coming into this industry. You know, obviously no one that's in vertical farming has been doing it for more than five or maybe 10 years. You know at max. But you know someone who's kind of has seen the opportunities are relatively new to the space. What's been some like ah-has for you, as you kind of spend more time here?

23:03 - Cody Journell (Guest)

Yeah, I think it's always eye-opening for me to go to those places. Like you know, indoor ag-con or things along those lines and you know, we went to the GAP summit up in Washington DC last year where they were talking about our inputs and outputs in our agriculture system and where we were lacking and what was needed to get up to the point where we actually were producing enough to supply our country's agriculture systems. And you know, it's I don't want to say it's like we're patting ourselves on the back while we're sitting there, but it's really refreshing to hear these are the problems that need to be solved.

23:35

We don't necessarily have a solution for them yet, but, as you know, that's what's going to be important as we move along. So today they were saying we need solutions for small to medium-sized farmers, we need crop diversity, we need to stop just focusing on the leafy greens and things along those lines. There's a lot of other things in our agriculture space that need to be addressed and we feel like CEA can do that Same thing. You know, the capital requirements came up. So we you know our team kind of just looks at each other and smiles, knowing that we're on the right path. We still have to implement and execute everything, but it is good to hear that we're kind of moving forward in the right direction.

24:15 - Harry Duran (Host)

Talk to me a little bit about your journey as the CEO and how's that been for you, especially with, you know, leading a indoor farming company, and how are you growing as a leader? And how do you think about like growing your team, you know, to meet the needs of you know how fast that is growing.

24:34 - Cody Journell (Guest)

Sure, yeah, it's been.

24:35

You know, getting into the agriculture space and that kind of climate has been a little challenging at first.

24:43

I've been in business before, started in real estate, and family always had their own businesses, so it was good to see kind of how they work things out that way and again problem solved.

24:53

But you know, the biggest thing is just taking all these minds that are have different expertise. You know we have one of our employees is really just focused on the tech stack, talked about Luke Giles and who's really focused on the development aspect of it and the historic tax credits. And then we've got another guy that's focused on the environmental impacts and trying to get everything to operate in that climate smart environment. So you do feel like a puppeteer a lot of times and you're just trying to connect all the dots and get the right people on the same page. But you know I actually have a background and collegiate football as well. So taking those experiences, the leadership you know, learning from some great coaches and teammates and kind of seeing how those you know high stress environments operate and what you've got to prepare for that, a lot of that stuff has really come to fruition and helped us move this project along.

25:46 - Harry Duran (Host)

What's a tough question you've had to ask yourself recently.

25:50 - Cody Journell (Guest)

A lot of it comes down to. Is it the right time?

25:53 - Harry Duran (Host)

Yeah.

25:54 - Cody Journell (Guest)

You know there's the with the economy, the way it's trending right now. There's a lot of uncertainty but you know, at the end of the day it's, I think, the project is the right project. So, whether it's the perfect timing right now or it's gonna be, you know, a couple years down the road, I think you know that those have been the questions that kind of keep you up at night to a certain degree, but at the end of the day you look back at it and say this is really solving some problems as long as we continue to execute and go along our way. It might not happen as fast as we were expecting or wanted to, but we are again on the right track and let's keep pushing this thing forward and make it, you know, a reality.

26:34 - Harry Duran (Host)

When you think about the folks that you're helping, you know, in terms of taking a lot of that that load off their minds and their backs and their wallets, in terms of infrastructure and setup, which is, you know, your sweet spot, and, obviously, where you guys have experience, who is an ideal person or ideal client to work with you. And when you think about folks having their ducks in order, whether it's their finances, whether it's their marketing plan, whether it's their experience in ag you know, I know, it's still early days, but when you think about who is ideally someone that's the best fit to work with you, given where they are on a journey, and also thinking about how folks should be preparing if they, you know, wanna work with someone like Veg, you know what comes to mind for you.

27:17 - Cody Journell (Guest)

Sure, and you know I think it always helps. We mentioned that we focus on small to medium size growers and also, you know, ideally you find a partner or tenant that is a little bit into the business already. They've got some production, they've got some distribution setup and they're really looking to just scale their operations, improve their margins and grow their business. But at the same time we're not shutting the door on those that wanna get their foot in the door. So you know, ideally you have somebody that comes and says, hey, we're operating a 1,000 square foot facility right now. Here are our numbers. We've got, like you said, our marketing plan together. We've got our distribution channels together.

27:58

There's more demand for our product than what we're able to keep up with right now, but we don't have the capital to go out and build a new facility or renovate a new facility.

28:07

So we're coming to you to get, you know, that extra 2,000, 3,000 square feet and you know you have the facility already ready. So ideally that's probably our golden child client. But again, we're just getting our foot in the door with CEA, as most people are, because it's such a new industry. So it's definitely doable, and partnering with consultants and folks that you know, provide farming as a service, things along those lines can certainly help those folks that are interested in just getting started in it, and that's honestly that's one of the best things about being in a school is that the classrooms are already kind of compartmentalized and the tax credit programs that we use you're able to move walls within those classrooms, can't necessarily move hallways and doors, but you know you can throttle up or throttle down how much square footage you need and we can kind of modularize it to the point where it could we could upfit it for any size client. Really.

29:06 - Harry Duran (Host)

How much can you talk about what the roadmap looks like for VEG? And you mentioned even the number of schools that are not in use. It was a high number and I think for the listeners it's gonna be a surprise to hear that there's that many opportunities there. And obviously you're well poised, because I don't know if you have first mover status, but I think you really understand the real estate market and you understand how to have those conversations with cities and what you can and can't do in these spaces. So I think there's a lot that you're learning along the way. So what's the potential for VEG, either locally or across the country?

29:40 - Cody Journell (Guest)

Right that was another thing that came up today at indoor ACON was we need to stop safeguarding all of our information to make this industry work Like. We need to start working together. So I've had some reservations on getting out and sharing our concept and what we're trying to do. But at the same time, yeah, you look at this and say if somebody is able to go source a school building and do this and make it work like that's just better for the industry overall. But with that said, there are a lot of complexities that come with not just doing development but acquisition of the school, making sure that historic tax credits work, because that's a vital piece of it and the climate smart piece of our concept that we really feel like is gonna help us stand out and trying to make that grow environment carbon negative and move things forward that way.

30:29

So yeah, I think as far as our roadmap goes, we are in the kind of seed round of funding at the moment. We've prepared three classrooms right now for growing. Within the next couple of months we're gonna have a growing setup in two of these classrooms to start the experimentation for the SBIR grant from the Department of Energy. So that will be our first kind of step into trying to get the climate smart piece to work. But within the next six to eight months we're hoping to be up for production for some of our own product and really hoping that shows the proof of concept to potential tenants that are interested in coming through the space. We have a lot of conversations going with certain folks but obviously the facility has to be ready for them to move in. So if we can show that this model is working the historic tax credits work, which we know they do because we've done them on residential projects before then this should come and speed things up for the rest of the development of the project.

31:32 - Harry Duran (Host)

As someone who's new to the CEA and obviously been attending the conferences, so you're seeing what a lot of the conversations are that are happening in this space. What has you excited when you think about it personally? You were looking at it from the outside and when you started VEG because you saw the potential here. So now you've got projects in motion. So I know it's hard to kind of stop and take a pause and reflect on everything you've accomplished so far. But when you think about getting up in the morning and what keeps you going, what is it about what you're seeing and what you're doing on a daily basis that keeps you moving forward?

32:10 - Cody Journell (Guest)

Sure, yeah, I think, at the end of the day, the really knowing and especially hearing from other folks and meeting other farmers, things along those lines that this is something that can really provide a solution for their business and help them become profitable. Some folks that we've talked to are losing money right now and they're scared, to put it bluntly, that they're going to go out of business because they can't get their margins to work out. So knowing that, hey, this isn't just a project for us to be successful, it's something that we can really provide a much needed space for the industry to come and again fill those gaps in our local agriculture that's what gets me up in the morning Allows me to kind of take some of these problems that we're trying to solve on the chin and deal with the stress behind it and all the moving pieces that we're trying to put together.

33:02 - Harry Duran (Host)

Has it been a challenge to communicate to family and friends what you're doing, because I've seen that conversation happen. A lot of people like wondering what it is that you're doing and what's this more important thing.

33:13 - Cody Journell (Guest)

I feel like I am explaining Bitcoin again for the first time, if that puts it in any perspective for people. I'm sure the folks in the industry feel the same way, but when you really sit down and especially in our area there are some people that kind of push back on it. But once we really talk about the benefits of control to agriculture being able to grow year round, being able to grow pesticide free, being able to grow crops in our region that we typically wouldn't be able to because of the environment that it's in and I think they start to put the pieces together.

33:47

It is a little bit difficult to explain, okay, well, it's fairly easy to explain vertical farming and why that makes sense.

33:56

But when we start getting into our concept and the schools and the tax credits and then leasing this to vertical farmers and how this is going to be a good product for each region, you start to lose some people. But it really is just about the messaging making sure that you don't kind of overwhelm them with the possibilities up front. We've got guys on our team that are big thinkers, definitely, so we found a good balance of between pulling people back in and saying this is what we're doing immediately, this is the possibilities into the future that could happen. We're going to work towards that. But the core competency of it is what we're doing for our business model right now.

34:40

And it's interesting because we talk to people in the agriculture space. There's a certain thing that speaks to them that makes sense when we talk to folks in the technology space or the environmental space, parts of this speak to them. The same thing with real estate. We run some investor groups and stuff like that in our area. The real estate piece of it makes sense to them buying the buildings for a low cost and be able to develop them at a low cost and then leasing and things along those lines. So it's really cool to kind of marry all those concepts together.

35:16 - Harry Duran (Host)

I think one of the things that I noticed myself as I started having these conversations a couple of years ago is paying more attention when I was in the supermarket about where stuff comes from, turning over the backs of these bagged lettuces and seeing that 90% of them coming from Salinas, and I think it was an education process for myself. But then, even as I started to explain it to family members about I'm talking of, to vertical farming companies and what's that? And do you know how far your lettuce travels to get to your plate? And so it's interesting because the people who are in it know the potential. But a lot of times it's all dependent on the consumer and getting them to change their habits, and I think that's part of what some of the pill climb is going to be for a lot of folks in this industry.

35:57 - Cody Journell (Guest)

Yeah, it sure is, and I know to your point. When we started shopping again after getting into this space, I was actually surprised that some of the products that we were already buying were in vertical farms, and so we started to look them up and it was eye-opening because the lettuce and the packaging lasted so much longer and it tasted fresher and we didn't know why that was until we really started to kind of dig into it.

36:22

But I'm convinced that it's the way that we're going to be able to supplement our agriculture space from now to the future. We're losing I think we're losing somewhere around 2,000 acres of farmland in the US per day to redevelop. So that's 700 plus thousand a year that we're losing. Populations increasing, consumer preferences are changing. They want more food, which we have less land, and they want it grown in an environmentally friendly manner. So how are we going to solve that problem? That's in walks, vertical farming and CEA.

37:05 - Harry Duran (Host)

I'm interested in the potential for the projects you're working on, given the fact that you're in a School and a building and obviously there's restrictions on what you can and can't do. So you do mention the classrooms, and so are there thoughts about how some of these projects could morph or be a hybrid of an opportunity To do some actual education as well?

37:25 - Cody Journell (Guest)

Definitely and we're actually pursuing. You know I mentioned I was a Virginia Tech graduate and they're obviously local here to the area. I'm pursuing some grants through the College of Agriculture and Life Sciences that would provide space for certificate programs and, on top of that, some workforce development type of education. And you know, one of the questions always comes up is labor. I do feel like, especially if you're focused on rural areas, which is another kind of proponent to what we're doing is Trying to create these things in rural areas that need economic incentive and development within their area. But there's always the question of do you feel like you're gonna be able to find enough skill labor to do this? And you know A lot of the folks that we've talked to said You'd be surprised that the people that are interested in learning this stuff that become, you know, pretty high-level Farmers are a lot of times don't even have a high school education, something that you know.

38:21

Somebody provided a program and they came in and learned and said I never knew, you know how our Supply chain system and the seed network and everything like that worked, and they just pick it up and run with it. And that's what we're gonna try and do with these grant programs is build out a certificate program to where you know Folks in the the area and the community can come and learn. But also you know the community colleges and the other colleges in the area. They've got a space to come and learn hands-on. I mean, that's really the only way that I learn is by doing Especially farming. I feel like you. You know you could read it in a book, but you really need to be in a facility and and working with your hands to know what you're doing.

39:00 - Harry Duran (Host)

Yeah, that path almost lends itself to what would traditionally be like a trade path. You know someone wants to be a plumber, electrician. You know they go to school to learn that and I think this could be an interesting opportunity. You know, because there's not, I think, to your point, a lot of the education and a lot of learning and experience comes from doing it and it's something that people can be taught early on and, and I think it's getting a lot of more visibility and I think a lot more people are seeing this as a viable career path. So thank you for taking the time to come on.

39:28

It's been interesting to see all the different models in vertical farming and I think what veg is doing is really helpful.

39:34

Especially, you know, when people first got started, they I think they figured that they have to do it all themselves. You know that and I think a lot of people figured out the hard way that wasn't the path and it was just wasn't feasible or economically viable for them. So I think you know how, with you and your team having experience, especially, you know in the area of what to do locally and how to take advantage of these zones and all the credits that are helpful for you. I think that takes a lot of the burden off of the farmers who really just want to farm and and focus on, you know, creating the right crop, maybe doing some marketing and getting into the hands of the right people. So I think you're finding on I'm guessing you know from the conversations you're having and the success you're having so far that model is resonating with people and it's sort of like providing some Relief for them to realize that they don't have to have all the parts figured out if they want to get into vertical farming.

40:23 - Cody Journell (Guest)

Absolutely, and you know to your point, we'd love to talk to anybody that will be interested in locating and you know, some of our space and this facility or a future facility down the road. So definitely, you know, feel free to reach out and and these facilities that we're creating with the aggregators that the hubs provide themselves to, and We've talked to somebody about doing, like, third-party nutrient testing at the facility. So you know, we're trying to build out this model where everything is in-house and you're able to, you know, have these creative collisions with between each other and really grow within the space. So I think it's going to be an awesome project and really want to get the right people and the the right mind frame of folks that are willing to come in and make this work.

41:08 - Harry Duran (Host)

Yeah, that makes a lot of sense. So, as we wrap up, I've been leaving some time at the end of these conversations for any message that you have for your peers, your colleagues, a lot of like you know, your fellows, ceos and leaders in the industry. You listen to the show and I've been on this show, so I think it's important and it's something you alluded to earlier. This idea of, like you know, rising tide lifts all boats and we're all in this together.

41:29 - Cody Journell (Guest)

So I think it's important Anything that comes top of mind for you for like a message to you know, your peers in the industry Sure, yeah, I think I'll just you know kind of piggyback on that same point is there's certain information that probably should be safeguarded from a business perspective, but it's all about collaboration and I said it before, creative collisions. Until you really sit it down or start on zoom calls and talking to other folks in your industry, don't know how you could help each other out, and it really is something that's gonna, you know, like push this industry to new heights. So that would be my biggest just takeaway is I'm, at part, a collaborator. I want to work with a team. You know I want to lead a team. I want to facilitate other people being successful.

42:15

So the more conversations we have and the more we do together, I think you're are gonna be beneficial to the industry as a whole.

42:22 - Harry Duran (Host)

Yeah, I couldn't agree more and I'm glad to see them and grateful to cultivate it for making the introduction. They've been doing some great work and I imagine they've been pretty helpful for you to get you know lay the land and what's happening and who to who to get you connected with. So I think they you know they always do a good job of that, so I always want to give them a shout out whenever possible.

42:40 - Cody Journell (Guest)

Definitely no. It's been great relationship so far and it's it's led to other relationships, which have also led to other relationships, so that's the benefit of it.

42:48 - Harry Duran (Host)

Yeah, so Cody. The website is veg Inc. V e, g, g, I n c dot com. Anywhere else Do you want to send folks, to get connected or to learn more?

42:58 - Cody Journell (Guest)

We're kind of building out our Instagram at the moment. We took a backseat to that when we were heads down trying to get all this together. But that's also the e, g, g, dot and see. And then I don't mind giving out my personal email. Just see Jernel, see J O. You are any L? L at veg Inccom. If you are interested in collaborating on something or locating in a facility, talking about what that would look like, definitely reach out to me and you know we'll get somebody in touch.

43:26 - Harry Duran (Host)

Okay, we'll make sure all those links are in the show notes as well. Thanks for coming on and sharing the story. Really excited to see the work you're doing at veg and I'm sure there's gonna be a. There's a lot of folks that are listening, for whom this would be a good fit, so I appreciate your time.

43:39 - Cody Journell (Guest)

Yeah, absolutely. Thank you again you.